Jaakko Kuorikoski

Like other mathematically intensive sciences, economics is becoming increasingly computerized. Despite the extent of the computation, however, there is very little true simulation. Simple computation is a form of theory articulation, whereas true simulation is analogous to an experimental procedure. Successful computation is faithful to an underlying mathematical model, whereas successful simulation directly mimics a process or a system. The computer is seen as a legitimate tool in economics only when traditional analytical solutions cannot be derived, i.e., only as a purely computational aid. We argue that true simulation is seldom practiced because it does not fit the conception of understanding inherent in mainstream economics. According to this conception, understanding is constituted by analytical derivation from a set of fundamental economic axioms. We articulate this conception using the concept of economists' perfect model. Since the deductive links between the assumptions and the consequences are not transparent in ‘bottom‐up’ generative microsimulations, microsimulations cannot correspond to the perfect model and economists do not therefore consider them viable candidates for generating theories that enhance economic understanding.

The most common argument against the use of rational choice models outside economics is that they make unrealistic assumptions about individual behavior. We argue that whether the falsity of assumptions matters in a given model depends on which factors are explanatorily relevant. Since the explanatory factors may vary from application to application, effective criticism of economic model building should be based on model-specific arguments showing how the result really depends on the false assumptions. However, some modeling results in imperialistic applications are relatively robust with respect to unrealistic assumptions. Key Words: unrealistic assumptions • economics imperialism • rational choice • as if • robustness.

The invariance under interventions –account of causal explanation imposes a modularity constraint on causal systems: a local intervention on a part of the system should not change other causal relations in that system. This constraint has generated criticism against the account, since many ordinary causal systems seem to break this condition. This paper answers to this criticism by noting that explanatory models are always models of specific causal structures, not causal systems as a whole, and that models of causal structures can have different modularity properties which determine what can and what cannot be explained with the model.

Although there has been much recent discussion on mechanisms in philosophy of science and social theory, no shared understanding of the crucial concept itself has emerged. In this paper, a distinction between two core concepts of mechanism is made on the basis that the concepts correspond to two different research strategies: the concept of mechanism as a componential causal system is associated with the heuristic of functional decomposition and spatial localization and the concept of mechanism as an abstract form of interaction is associated with the strategy of abstraction and simple models. The causal facts assumed and the theoretical consequences entailed by an explanation with a given mechanism differ according to which concept of mechanism is in use. Research strategies associated with mechanism concepts also involve characteristic biases that should be taken into account when using them, especially in new areas of application

ABSTRACTWe investigate the applicability of Rodrik’s accounts of model selection and horizontal progress to macroeconomic DSGE modelling in both academic and policy-oriented modelling contexts. We argue that the key step of identifying critical assumptions is complicated by the interconnectedness of the common structural core of DSGE models and by the ad hoc modifications introduced to model various rigidities and other market imperfections. We then outline alternative ways in which macroeconomic modelling could become more horizontally progressive.

Evolution is often characterized as a tinkerer that creates efficient but messy solutions to problems. We analyze the nature of the problems that arise when we try to explain and understand cognitive phenomena created by this haphazard design process. We present a theory of explanation and understanding and apply it to a case problem – solutions generated by genetic algorithms. By analyzing the nature of solutions that genetic algorithms present to computational problems, we show that the reason for why evolutionary designs are often hard to understand is that they exhibit non-modular functionality, and that breaches of modularity wreak havoc on our strategies of causal and constitutive explanation.

Whether simulation models provide the right kind of understanding comparable to that of analytic models has been and remains a contentious issue. The assessment of understanding provided by simulations is often hampered by a conflation between the sense of understanding and understanding proper. This paper presents a deflationist conception of understanding and argues for the need to replace appeals to the sense of understanding with explicit criteria of explanatory relevance and for rethinking the proper way of conceptualizing the role of a single human mind in the collective scientific understanding.

Mechanisms are often characterized as causal structures and the interventionist account of causation is then used to characterize what it is to be a causal structure. The associated modularity constraint on causal structures has evoked criticism against using the theory as an account of mechanisms, since many mechanisms seem to violate modularity. This paper answers to this criticism by making a distinction between a causal system and a causal structure. It makes sense to ask what the modularity properties of a given causal structure are, but not whether a causal system is modular tout court. The counter-examples to the interventionist account are systems in which a particular structure is modular in variables, but not in parameters. A failure of parameter-modularity does not by itself threaten the interventionist interpretation of the structure and the possibility of causally explaining with that structure, but it does mean that knowledge of the structure is not sufficient to constitutively explain system-level properties of the embedding system

Robert Sugden argues that robustness analysis cannot play an epistemic role in grounding model-world relationships because the procedure is only a matter of comparing models with each other. We posit that this argument is based on a view of models as being surrogate systems in too literal a sense. In contrast, the epistemic importance of robustness analysis is easy to explicate if modelling is viewed as extended cognition, as inference from assumptions to conclusions. Robustness analysis is about assessing the reliability of our extended inferences, and when our confidence in these inferences changes, so does our confidence in the results. Furthermore, we argue that Sugden’s inductive account relies tacitly on robustness considerations.

Political science and economic science . . . make use of the same language, the same mode of abstraction, the same instruments of thought and the same method of reasoning. (Black 1998, 354) Proponents as well as opponents of economics imperialism agree that imperialism is a matter of unification; providing a unified framework for social scientific analysis. Uskali Mäki distinguishes between derivational and ontological unification and argues that the latter should serve as a constraint for the former. We explore whether, in the case of rational-choice political science, self-interested behavior can be seen as a common causal element and solution concepts as the common derivational element, and whether the former constraints the use of the latter. We find that this is not the case. Instead, what is common to economics and rational-choice political science is a set of research heuristics and a focus on institutions with similar structures and forms of organization

The recognition that models and simulations play a central role in the epistemology of science is about fifteen years old. Although models had long been discussed as possible foundational units in the logical analysis of scientific knowledge, the philosophical study of modelling as a distinct epistemic practice really got going in the wake of the Models as Mediators anthology edited by Margaret Morrison and Mary Morgan. In spite of the broad agreement that in fact much of science is model-based, however, there is still little agreement on pretty much anything else. What are models? Are they representations or fictions, abstract entities or concrete artifacts? Which functions do they play? Can they explain..

Probabilistic phenomena are often perceived as being problematic targets for contrastive explanation. It is usually thought that the possibility of contrastive explanation hinges on whether or not the probabilistic behaviour is irreducibly indeterministic, and that the possible remaining contrastive explananda are token event probabilities or complete probability distributions over such token outcomes. This paper uses the invariance-under-interventions account of contrastive explanation to argue against both ideas. First, the problem of contrastive explanation also arises in cases in which the probabilistic behaviour of the explanandum is due to unobserved causal heterogeneity. Second, it turns out that, in contrast to the case of pure indeterminism, the plausible contrastive explananda under causal heterogeneity are not token event probabilities, but population-level statistical facts